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प्रश्न
Distinguish between :
Propensity to consume and Propensity to save.
उत्तर
| Basis of Difference | Propensity to consume | Propensity to save |
| Also known as | Consumption function | Savings function |
| Defines | Relationship between income and consumption | Relationship between income and saving |
APPEARS IN
संबंधित प्रश्न
Marginal propensity to consume + marginal propensity to save ......................... '
(zero \ one \ less \ more)
In an economy investment is increased by Rs. 300 crore. If marginal propensity to consume is 2/3, calculate increase in national income.
Find equilibrium national income:
Autonomous consumption expenditure = 120
Marginal propensity to consume = 0.9
Investment expenditure = 1100
Suppose marginal propensity to consume is 0.8. How much increase in investment is required to increase national income by Rs. 2000 crore? Calculate.
In an economy an increase in investment by Rs 100 crore led to ‘increase’ in national by Rs 1000 crore. Find marginal propensity to consume.
An economy is in equilibrium. Find marginal propensity to consume :
Autonomous consumption
Expenditure = 100
Investment expenditure = 100
National Income = 2,000
An economy is in equilibrium. Find autonomous consumption expenditure:
National Income =1,600
Investment Expenditure = 300
Marginal Propensity to Consume= 0.8
The value of marginal propensity to consume is 0.6 and initial income in the economy is Rs 100 crores. Prepare a schedule showing Income, Consumption and Saving. Also show the equilibrium level of income by assuming autonomous investment of Rs 80 crores.
Define marginal propensity to save.
Calculate Marginal Propensity to Consume from the following data about an economy
Which is an equilibrium:
National income = 2000
Autonomous Consumption expenditure = 200
Investment expenditure = 100
Explain the Keynesian psychological law of consumption.
Answer the following question :
Explain the development and non-development expenditures of government .
Write explanatory answer:
Explain the subjective and objective factors determining consumption function.
Fill in the blank with appropriate alternatives given in the bracket:
The part of income not spent is________.
Match the following Group ‘A’ with Group ‘B’:
| Group ‘A’ | Group ‘B’ | ||
| (a) | Giffen’s goods | (1) | Uses of commodities |
| (b) | Essential commodities | (2) | Keynes |
| (c) | Consumption | (3) | Primary function of bank |
| (d) | Consumption function | (4) | Inferior goods |
| (e) | Accept deposits | (5) | Money lender |
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(6) | Inelastic demand | |
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(7) | Luxurious commodities |
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(8) | Dr. Marshall |
Answer in brief.
Explain the relationship between Income and Consumption.
Write answers in ‘one’ or ‘two’ paras each :
Explain the concept of saving function.
Define 'or' explain the following concept.
Propensity to save
Define or explain the following concept
Marginal Cost.
Suppose in a hypothetical economy, the income rises from ₹ 5,000 crores to ₹ 6,000 crores. As a result, the consumption expenditure rises from ₹ 4,000 crores to ₹ 4,600 crores. Marginal propensity to consume in such a case would be __________.
The consumption function of an economy is : C = 40 + 0.8 Y (amount in ₹ crores). Determine that level of income where the average propensity to consume will be one.
Answer the following question.
Which of the two, average propensity to consume or average propensity to save, can be negative, and why?
An economy is in equilibrium. From the following data calculate investment expenditure :
(i) Marginal propensity to consume = 0·9
(ii) Autonomous consumption = 200
(iii) Level of income = 10000
Answer the following question.
In an economy, investment increased by 1,100 and as a result of it income increased by 5,500. Had the marginal propensity to save been 25 percent, what would have been the increase in income?
The relation between APC and MPC in Keynes Psychological consumption function is ______.
MPC = MPS = ?
Which or is true?
Which one is correct?
Which of the following is correct?
The value of MPC is ______
The relation between consumption and savings are ______
A consumer spending on the purchase of goods regardless of the income in possession is an example of _______ consumption.
Calculate equilibrium level of income for a hypothetical economy, for which it is given that:
- Autonomous Investments = ₹ 500 crores, and
- Consumption function, C = 100 + 0.80Y
______ buy goods and services for consumption and also supply factors of production.
Which of the following statement is true?
Marginal Propensity to Save is equal to ______
Calculate Autonomous Consumption expenditure from the following data about an economy which is in equilibrium:
National Income = Rs 1,200
Marginal Propensity to Save = 0.20
Investment expenditure = Rs 100
Which of the following points establish the relationship between MPS and MPC?
Identify the correct pair of from the following Columns I and II:
| Columns I | Columns II |
| 1. Total Product increases at an increasing rate and Marginal Product rises till it reaches its maximum point. | (a) Second Stage |
| 2. Total product increases at a decreasing rate and reaches maximum, and MP becomes zero. | (b) First Stage |
| 3. Total product also decreases and marginal product (MP) becomes negative. | (c) Third Stage |
| 4. Improvement in technique of production and discovery of fixed factor substitute can postpone the operation of law for some time. | (d) Fourth Stage |
If the value of Average Propensity to Save (APS) is 0.2 and National Income is ₹4,000 crores, then consumption will be ______
If the value of Average Propensity to Consume (APC) is 0.8 and National Income is ₹4,000 crores, the value of savings will be ______.
Average Propensity to Consume is equal to:
If the marginal propensity to consume is greater than marginal propensity to save, the value of the multiplier will be:
The marginal physical product of a factor must be ______ when the total physical product is falling.
Identify the correctly matched pair from Column A to that of Column B:
| Column A | Column B | ||
| (1) | MPC | (a) | Ratio of Savings to Consumption |
| (2) | APC | (b) | Ratio of Consumption to Income |
| (3) | APS | (c) | Ratio of Consumption to Savings |
| (4) | MPS | (d) | Ratio of Savings to Investment |
If in an economy, the value of investment multiplier is 4 and Autonomous Consumption is ₹ 30 Crore, the relevant consumption function would be :
Assertion (A): Saving curve makes a negative intercept on the vertical axis at zero level of income.
Reason (R): Saving function refers to the functional relationship between saving and income.
An Economy is in equilibrium, calculate the Marginal Propensity to Save (MPS) from the following:
- National Income (Y) = ₹ 4,400
- Autonomous Consumption `bar("C")` = ₹ 1,000
- Investment Expenditure (I) = ₹ 70
The value of ______ can be greater than one.
How is APS obtained from the APC?
What is meant by autonomous consumption expenditure? Show it on a diagram.
APC can be greater than one, but MPC is always less than one. Give a reason to justify this phenomenon.
